Select the correct answer for each of the following questions.

1. On January 1, 20X7, the partners of Casey, Dithers, and Edwards, who share profits and losses in the ratio of \(5: 3: 2\), respectively, decided to liquidate their partnership. On this date the partnership condensed balance sheet was as follows:

On January \(15,20 \times 7\), the first cash sale of other assets with a carrying amount of \(\$ 150,000\) realized \(\$ 120,000\). Safe installment payments to the partners were made the same date. How much cash should be distributed to each partner?

2. In a partnership liquidation, the final cash distribution to the partners should be made in accordance with the:

a. Partners' profit and loss sharing ratio.

b. Balances of the partners' loan and capital accounts.

c. Ratio of the capital contributions by the partners.

d. Ratio of capital contributions less withdrawals by the partners.
The following balance sheet is for the partnership of Art, Blythe, and Cooper and relates to questions 3 through 5 :

Figures shown parenthetically reflect agreed profit and loss sharing percentages.
3. If the firm, as shown on the original balance sheet, is dissolved and liquidated by selling assets in installments, and if the first sale of noncash assets having a book value of \(\$ 90,000\) realizes \(\$ 50,000\) and all cash available after settlement with creditors is distributed, the respective partners would receive (to the nearest dollar):

4. If the facts are as in question 3 except that \(\$ 3,000\) cash is to be withheld, the respective partners would then receive (to the nearest dollar):

5. If each partner properly received some cash in the distribution after the second sale, if the cash to be distributed amounts to \(\$ 12,000\) from the third sale, and if unsold assets with an \(\$ 8,000\) book value remain, ignoring questions 3 and 4 , the respective partners would receive:

6. The following condensed balance sheet is presented for the partnership of Arnie, Bart, and Kurt, who share profits and losses in the ratio of \(4: 3: 3\), respectively:

The partners agreed to dissolve the partnership after selling the other assets for \(\$ 200,000\). Upon dissolution of the partnership. Arnie should have received:

a. \(\$ 0\).

b. \(\$ 40,000\).

c. \(\$ 60,000\).

d. \(\$ 70,000\)

Transcribed Image Text:

Assets Cash $ 50,000 Liabilities and Capital Liabilities $ 60.000 Other Assets 250,000 Casey, Capital Dithers, Capital 80.000 90,000 Edwards, Capital 70,000 Total $300,000 Total $300,000